How to Obtain Specific US Antitrust Agency Guidance: The DOJ Business Review and the FTC Advisory Opinion Processes


Authors: Jim Lerner and Luis Blanquez

Both of the U.S. government agencies responsible for antitrust enforcement (the Department of Justice– “DOJ” and Federal Trade Commission – “FTC”) have review mechanisms available for companies seeking guidance on whether they are likely to take antitrust enforcement action against a proposed agreement or course of conduct: the DOJ has a Business Review process and the FTC has an Advisory Opinion process.

From a practical perspective (and putting aside mandatory Hart-Scott-Rodino merger filings), it is uncommon in the U.S. for parties to submit their agreements to the competition authorities for review before entering the agreement or undertaking the proposed conduct. Except in particular circumstances—such as with complex antitrust and intellectual property issues—most parties decide that the potential antitrust-enforcer guidance is not worth the time and effort involved in seeking such review.

But there are instances in which it does make sense to seek antitrust agency review, so we describe the processes here.

With respect to the DOJ Business Review process, while there has been expedited treatment for collaborations directly related to COVID, the “traditional” Business Review process tends to be lengthy (it can regularly take up to 6 months or more to get through the entire process) and complicated. Applicants for a Business Review letter must make a complete disclosure of all the necessary information about the agreement or collaboration for which a review is requested. This requires background information about the parties and industry, copies of any/all operative documents, detailed statements of any/all collateral oral understandings, and any additional information the Division requests. Depending on how the Division responds, it doesn’t necessarily result in any guarantees about what the Division will or will not do if the described conduct/collaboration goes forward. One other big downside is that the process is truly prospective––that is, it requires that the parties not start their proposed activities until after the Division responds.

The use of FTC Advisory Opinion process is similarly infrequent, also due to narrow set of conditions under which the Commission or the Commission Staff will actually consider such a request. At the linked document set out, the Commission will only consider an Advisory Opinion when (1) the matter involves a substantial or novel question of fact or law and there is no clear Commission or court precedent, or (2) the subject matter of the request and consequent publication of Commission advice is of significant public interest. The request for an advisory opinion must concern a course of action that the requesting party proposes to pursue. That is, the requesting party must intend to engage in the proposed conduct; hypothetical questions or questions about conduct that is already ongoing will not be answered. Furthermore, a proposed course of action must be sufficiently developed for the Commission or its staff to conclude that it is an actual proposal rather than a mere possibility, and to evaluate the proposal based on the description and supporting information provided with the request. At the same time, however, the parties cannot have started their requested conduct. As you can tell, the scope of this tool is very limited.

Assuming that an activity or agreement being contemplated is not per se” illegal and would generally be subject to a rule of reason analysis, with respect to whether a proposed activity or agreement is likely to be the subject of Agency enforcement action, parties often then look to see whether their proposed conduct or agreement is of the type that is addressed in the publicly available Agency guidelines, such as the Antitrust Guidelines for Collaborations Among Competitors. The DOJ and FTC take lots of time and great care in developing these Guidelines. They develop and issue them with the expectation that businesses will rely on them. While these Guidelines do not have the force of law, they reflect how the agencies will analyze agreements and conduct. Accordingly, parties can generally feel comfortable that if they fall within whatever “safe harbor” thresholds appear in the relevant Guidelines, or if the conduct/agreement is not explicitly prohibited under such Guidelines, it is not likely to be subject to government enforcement activity (private lawsuits, of course, are another matter). This is very similar to what the European Commission does in the EU, for instance with the Horizontal Guidelines, which are currently under review.

While it is reflexive to fear the unknown and unfamiliar, if you are trying to gain a foothold in a US market, but another company or group of companies is keeping you from competing, you should consider whether you have an antitrust claim. You just might.

If anything involving antitrust comes up, please feel free to contact us to discuss whether we can help you. We litigate as plaintiffs and defendants, handle antitrust issues for mergers and acquisitions, and offer antitrust counseling.

Image by Dean Moriarty from Pixabay

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